It comes after the company lodged the environmental impact statement (EIS) for the project with the Saskatchewan Ministry of Environment in December.

BHP said today it had started drilling and site preparation for the ground freezing process that is necessary before the production and service shafts can be sunk.

The company expects the project to begin production in 2015 at a rate of 8 million tonnes of potash per annum.

The project has an in-situ resource of 3.37 billion tonnes, enough to ensure a 70-year mine life.

Last year, BHP committed $US240 million ($A237.60 million) to the early development of the project.

The company said it is looking to build a significant presence in Saskatchewan and will continue to fund community development.

In November, BHP was forced to dump a $39 billion bid for PotashCorp of Saskatchewan due to opposition from the Canadian Government.

Shares in BHP were last trading A45c higher to $46.15.